Journal of Finance and Investment Analysis, vol. 1, no. 4, 2012, 37-51
ISSN: 2241-0998 (print version), 2241-0996(online)
Scienpress Ltd, 2012
Analysis of Inviting Foreign Direct Investment to
Guizhou Province of China
Cai Li1, Liu Xiuling2 and Tan Huiping3
Abstract
With China's enhancing pace of opening up, Guizhou has been integrated into the
world economy. facing an open economic environment, it is of great importance
for Guizhou to make full use of FDI to promote the development of economy.
Guizhou province of China have attracted some foreign investment since the
implement of the reform and opening up policy. This paper points out the
characteristics of Guizhou’s attracting FDI, including scale, forms, countries,
industrial distribution and geographical distribution and the operation performance
of foreign-funded enterprises. Finally, this paper points out the remmended
policies, such as the investment policy, financial policy and industrial
development policy for attracting FDI in Guizhou.
JEL classification numbers: F21
Keywords: FDI, Guizhou, China, Investment
1
International Business School, Dalian Nationalities University.
e-mail: caili@dlnu.edu.cn
2
International Business School, Dalian Nationalities University.
e-mail: luck1990@126.com
3
International Business School, Dalian Nationalities University.
Article Info: Received : September 15, 2012. Revised : October 17, 2012.
Published online : December 12, 2012
38
Cai Li et al.
1 Introduction
In the wake of the internationalization, Guizhou Province has interacted with the
global economy gradually. To further promote the economic development in
Guizhou, State Council of the People’s Republic of China highlighted in Opinions
of State Council on Further Promoting Sound and Rapid Economic Development
of Guizhou Province (2012), "Guizhou should make full use of the opportunities
of China - ASEAN Free Trade Area, Greater Mekong Subregion, Pan-Pearl River
Delta and other platforms to actively cooperate with south Asia and other
neighbouring regions, so as to be increasingly open."
FDI is an important external force for Guizhou to boost the economic
development. At the same time, foreign-funded enterprises creat a large number of
job opportunities, prompt the upgrading of the industrial structure in Guizhou, and
in particular deepen the intrinsic link between Guizhou and other regions and
countries. Foreign-funded enterprises have become a significant driving force of
the economic development of Guizhou, and play an indispensable role in
impelling the sustainable social development in Guizhou.
This paper analyzes the impact of FDI in Guizhou and gives the suggested policies
for Guizhou government and foreign-funed enterprises for further development as
well.
2 The situation of utilization of FDI in Guizhou province
2.1 The amount of utilization of FDI
With the development of the expanded FDI, the performance of foreign
investment has been improved. Japan's Kyocera Corporation established a joint
venture-Kyocera Zhenhua Communication Equipment Co., Ltd. in Guiyang to
produce CDMA mobile phones and related communication products, with the
total investment of USD37.22 million. Zhuli Electric (Guiyang) Co., Ltd. invested
by Hong Kong Zhuli Electric Company is a large-scale foreign-funded export
processing enterprise. Its investment rises from the initial HKD1.8 million to
HKD45 million. SunStar from Korea and Hong Kong Rui Xing Company invested
USD2 million in the establishment of Guiyang Xiang Yun Fine Chemical Co., Ltd.
jointly. Dragon Smarter Investment Limited invested USD 13 million in Qianchun
Road Reconstruction Project.
On the other hand, the structure of the industries invested by foreign investors has
been further optimized. High-tech, export-oriented enterprises in Guizhou and
deep processing projects absorb more foreign investment. In recent years, the
large-scale projects of Snecma, Hong Kong New World Group, USA Wal-Mart
and Malaysia Parkson Group have been completed and put into operation
successfully. High-tech, high value-added industries and business services have
become the hot spots of FDI in the recent years. In Guizhou, more and more FDI
Analysis of Inviting Foreign Direct Investment
39
projects are involved with the foreign investment beyond USD10 million,
particularly Hong Kong New World Group invested USD244.9 million in real
estate sector in Jinyang New District of Guiyang City.
In recent years, the scale of FDI in Guizhou tends to become much larger. From
2005 to 2010, FDI in Guizhou showed that Guizhou's foreign investment
utilization was featured with three stages: first, from 1985 to 1992, the scale of
FDI was relatively small and grew slowly; second, from 1993 to 2004, the FDI
scale was slightly bigger than that of the first stage, and the value fluctuated up
and down at USD40 million; third, from 2005 till now, the FDI has surpassed the
threshold of USD100 million and tended to rise at a high growth rate. Especially
in 2011, the actually utilized foreign investment amounted to USD670 million,
both of the contractual foreign investment and the actually utilized foreign
investment set new records in Guizhou.
Table 1: The amount of utilization of FDI in Guizhou, 1979-2011 (USD10,000)
Year
Actually
Used FDI
Year-on-year
Growth Rate (%)
1979-1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
148
74
101
440
747
468
734
1979
4294
6363
5703
3138
4977
4535
4090
2501
2829
3700
5626
6533
10768
9384
12651
14904
-50
36.49
335.64
69.77
-37.35
56.84
169.62
116.98
48.18
-10.37
-44.98
58.6
-8.88
-9.81
-38.85
13.11
30.79
52.05
16.12
64.82
-12.85
34.81
17.81
Foreign
Captial
Actually
Absorbed
286
1276
376
1408
2102
2983
2845
3574
4922
8363
9637
10628
13834
18100
19532
19545
14010
9383
13191
13932
19568
18413
15333
17379
Proportion of
Used FDI
in Foreign Captial
Absorbed (%)
51.75
5.8
26.86
31.25
35.54
15.69
25.8
55.37
87.24
76.09
59.18
29.53
35.98
25.06
20.94
12.8
20.19
39.43
42.65
46.89
55.03
50.96
82.51
85.76
Cai Li et al.
40
2009
2010
2011
13364
29546
67000
-10.33
121.1
127.9
18027
45024
171000
74.13
65.62
39.18
"-" stands for data not available.
Source: Guizhou Provincial Bureau of Statistics, China National Bureau of
Statistics Survey Office in Guizhou, Guizhou Statistical Yearbook (Beijing,2011)
2.2 The performance of utilization of FDI
Compared to the China national average level, FDI in Guizhou develops slowly
with a small scale, as the performance index of utilization of FDI of Guizhou
(INDi) shows.
INDi = (FDIi / FDIw) / (GDPi / GDPw)
FDIi refers actually used amount of FDI of this region (i), FDIw refers actually
used amount of FDI of the whole country. GDPi refers the gross domestic product
of this region (i), GDPw refers the gross domestic product of the whole country.
Generally, the bigger the economic scale of a region is, the more FDI it attracts. If
INDi is equal to 1, the proportion of this region’s FDI in the country’s FDI is the
same with the proportion of its GDP in the country's GDP, reaching the national
average level of this country. If INDi is greater than 1, the region absorbs more
FDI relative to its GDP, higher than the national average level. If INDi is less than
1, FDI is lower than the national average level maybe due to the weak economic
competitiveness of this region.
According to the method above, Guizhou's INDi in 1990, 1995, 2000-2011, was
calculated, just shown in Table 2. According to Table 2, Guizhou's INDi was
always lower than 1, and generally less than 0.2. Only in 2010 and 2011, it was
higher than 0.2. This indicates that Guizhou’s INDi is lower than the China
national average level, and often less than 20% of the China national average level.
The average INDi within 14 years of Guizhou is only 0.144, equivalent to one
seventh of the China national average level. This reveals that Guizhou has not yet
become an attractive FDI hot spot compared with other regions of China, which is
not consistent with China's western development strategy and the trend of FDI in
China with is transferring to the western regions of China.
Table 2: The performance index of utilization of FDI in Guizhou, 2000-2011
(USD100 mln)
Analysis of Inviting Foreign Direct Investment
1990
1995
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Amount of
Actually
Used FDI in
Guizhou
Amount of
Actually
Used FDI in
China
0.05
0.57
0.25
0.28
0.37
0.56
0.65
1.08
0.94
1.27
1.49
1.34
2.95
6.7
34.9
375.2
407.2
468.8
527.4
535.1
606.3
603.3
630.2
747.7
924
900.3
1057.4
1160.1
41
Proportion
of Guizhou's
FDI Used in
China’s FDI
Used (%)
0.13
0.15
0.06
0.06
0.07
0.11
0.11
0.18
0.15
0.17
0.16
0.15
0.28
0.57
Proportion
of Guizhou's
GDP in
China’s
GDP (%)
1.39
1.05
1.04
1.03
1.03
1.05
1.05
1.07
1.05
1.03
1.06
1.14
1.15
1.18
Guizhou's
INDi
0.01
0.15
0.06
0.06
0.07
0.1
0.1
0.17
0.14
0.16
0.15
0.13
0.24
0.48
Source: Guizhou Provincial Bureau of Statistics, China National Bureau of
Statistics Survey Office in Guizhou, Guizhou Statistical Yearbook (Beijing,2011)
2.3 Utilization of FDI by country or region
The overseas investors from 30 countries and regions are mainly from Asian
countries and Hong Kong. Especially, Hong Kong enterprises invest in Guizhou's
manufacturing, real estate, electric power, mining, agriculture, services and other
sectors.
The main sources of the FDI in Guizhou lies in Asia, with about 43% share,
following by America. By country (region), the FDI clearly depends on only a few
regions and countries including Hong Kong and the British Virgin Islands.
Since the reform and opening up policy of China was implemented, by the end of
2010, more than 600 Hong Kong enterprises have invested in Guizhou. Among
the foreign investment institutions in Guizhou, enterprises from Hong Kong
accounted with a high proportion. In Guizhou, Hong Kong investors had 681
investment projects, with the cumulative contracted foreign investment of
USD2.481 billion and the cumulative actually used foreign capital of USD865
million. In 2010, the actually used foreign investment from Hong Kong was
USD180 million, 10 times of that in 2006. The FDI projects were involved with
farming, forestry, animal husbandry, fishery, manufacturing, transport,
warehousing, postal services and other sectors.
From January to October of 2011, Asian countries (regions) invested 35 FDI
projects in Guizhou, accounting for 67.3% of the total number of the FDI projects
in Guizhou in that year. The actual investment valued USD347.5 million,
Cai Li et al.
42
accounting for 82.8% of actually used FDI in Guizhou in 2011. Particularly, Hong
Kong invested 28 projects in Guizhou, accounting for 53.8% of the total number
of the FDI projects in that year; the actual investment reached USD333.29 million,
accounting for 79.3% of FDI in Guizhou in 2011.
Guizhou’s FDI depends on only a few regions and countries obviously. Once their
economic situation and trade policies change dramatically, their investment in
Guizhou may be substantially reduced, therefore Guizhou should not only
maintain the current relationship with these countries and regions, but also
actively establish the good relations with developed countries in Europe and
America as well as introduce the investment from these developed countries
vigorously to improve the status quo and avoid vulnerabilities and risks incurred
by the current simple structure of FDI countries and regions.
Table 3: Cumulative utilization of FDI in Guizhou by country or region (Top 10),
2004-2009 (USD10,000)
Cumulative Actually Used FDI
Amount
Share(%)
23837
35.26
No.
Country / Region
1
Hong Kong
2
British Virgin Islands
21429
31.69
3
Mauritius
4930
7.29
4
Australia
4018
5.94
5
Singapore
3574
5.29
6
Canada
2170
3.21
7
USA
2109
3.12
8
France
1569
2.32
9
Cayman Islands
765
1.13
10
Samoa
648
Source: Guizhou Provincial Department of Commerce
0.96
2.4 Utilization of FDI by industry
Through Table 4, for a long time, a very small amount (4.53%) of FDI was used in
the primary industry of Guizhou. More than 64% of the FDI projects for
contracted FDI and capital concentrated in the secondary industry. About 30% of
the FDI projects and capital lied in the tertiary industry.
Only in 2005, 2006 and 2010, more FDI was used in the primary industry. Little
investment was invested in the primary industry in 2008 and 2009. In other words,
a small amount of FDI was used in agriculture industry.
According to the historical data, since 1986, FDI has focused on the secondary
industry, mainly manufacturing sector. Compared with the primary industry and
Analysis of Inviting Foreign Direct Investment
43
the tertiary industry, the secondary industry of Guizhou attracts more FDI. From
January to August of 2011, the actually used FDI in the secondary industry
reached USD224.03 million, accounting for 63.1% of the total foreign capital used
in Guizhou; wherein, the manufacturing sector introduced USD148.30 million,
accounting for 41.8% of the total FDI used in Guizhou.
In the terms of the cumulative amount of FDI, only 30% of the foreign capital was
invested in the tertiary industry. However, in recent years, with the development
of Guizhou's tertiary industry, foreign investment projects have gradually
concentrated in the tertiary industry. In 2007, the amount of FDI in the tertiary
industry was almost the same with that in the secondary industry. In the tertiary
industry, real estate, scientific research, technic services and geological
prospecting, and financial intermediation sectors are the central parts of FDI
targets. In these sectors, the capital flows fast, and high profits are generated easily.
On the contrary, social services, science, education, culture and health care sectors
attract less FDI. On the whole, the amount of FDI in the tertiary industry is far
smaller than that of the secondary industry.
In 2011, the targets of FDI changed significantly. Electric power, gas and water
production and supply sectors became the new highlights. In the first half year of
2011, the actually used FDI (86% of the total amount of FDI in Guizhou) was
mainly applied to “electric power, gas and water production and supply” (USD70
million), “farming, forestry, animal husbandry and fishery” (USD60 million),
“leasing and business services” (USD30 million), “transport, storage and post”
(USD30 million). While, in the same period of 2010, 92.5% of the actually used
FDI was mainly used in manufacturing and real estate sectors.
Table 4: Cumulative utilization of FDI in Guizhou by industry, 1986-2010
(USD10,000)
Projects for Contracted FDI
Number
Share (%)
82
4.3
Actually Used FDI
Amount
Share (%)
7363
4.53
Primary
Industry
Secondary
1229
64.58
106279
65.45
Industry
Tertiary
592
31.1
48728
30.01
Industry
Total
1903
100
162370
100
Source: Guizhou Provincial Bureau of Statistics, China National Bureau of
Statistics Survey Office in Guizhou, Guizhou Statistical Yearbook (Beijing,2011)
The industrial distribution of the FDI is linked with Guizhou’s regional
characteristics, economic development and environments closely.
Firstly, foreign enterprises invest little in the primary industry because Guizhou’s
agricultural production has not reached the economic scale. On one hand, Guizhou
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Cai Li et al.
has uneven terrain, therefore it is difficult to conduct large-scale farming operation,
which does not comply with the requirements of the agricultural machinery. On
the other hand, rural areas of Guizhou adopt the Chinese characteristic agricultural
management system based on the household contract responsibilities, and the
decentralized management of farmers is not favorable to the formation of the
economic scale, inconsistent with the requirements of the large foreign enterprises.
Secondly, a high proportion of the FDI in Guizhou is used in the secondary
industry also because of Guizhou's specific characteristics. Guizhou has rich
electric power resources, Chinese herbal medicine resources, mineral resources
and agricultural resources, which have become the priorities for foreign investors
in Guizhou. Many companies come to Guizhou just for Guizhou's abundant
natural resources and mineral resources.
For instance, Hong Kong Shui On Group which is engaged in production and
development of cement and construction materials aggregated the dispersed local
small cement manufacturing companies based on Guizhou's abundant resources.
Hong Kong Ease Way Holdings Limited established Kaichen Aluminum Co., Ltd.
in Guizhou. These companies are just attracted by the resources of Guizhou,
therefore they mainly invest in the secondary industry. In the future, Guizhou
should make full use of its advantages in resources to guide foreign capital to
invest in the primary industry and the tertiary industry. Meanwhile, it should
vigorously introduce the FDI projects with high technology, low energy
consumption, environmentally friendly and high added value instead of the
projects with high pollution, high energy consumption.
In the early stage, a small amount of the FDI was involved with the tertiary
industry, maybe due to the former stringent restrictions on insurance, commerce,
foreign trade, financial intermediation sectors of Guizhou. Guizhou has been more
open and gradually relaxes the restrictions on the above sectors. Guizhou's tertiary
industry has also reached a certain scale and more foreign-funded projects will
concentrate in the tertiary industry gradually in the near future.
2.5 Operating performance of foreign-funded enterprises
According to Table 5, there were 102 foreign-invested designated size industrial
enterprises in Guizhou in 2010 with 26,116 employees averagely, the industrial
added value of RMB4.044 billion, the total industrial output value of RMB15.75
billion, the industrial sales output value of RMB14.42 billion, the total assets of
RMB25.1 billion, the revenue of principle business of RMB14.02 billion, the total
profits and taxes of RMB1.82 billion, and the total profits of RMB1.22 billion.
The nine indicators accounted for 3.4%, 3.25%, 3.3%, 3.7%, 3.6%, 4.2%, 3.5%,
2.7% and 3.8% separately of all designated size industrial enterprises in Guizhou.
The proportions indicates that foreign-invested designated size industrial
enterprises in Guizhou have not contribute much to Guizhou's industrial economy
yet, without strong driving effects.
Analysis of Inviting Foreign Direct Investment
45
Table 5: Major economic indicators of foreign-funded designated size industrial
enterprises in Guizhou, 2010 (RMB 100 million)
Item
Foreign-invested
Designated Size
Industrial Enterprises
All Designated Size
Industrial
Enterprises in
Guizhou
Percent
of (%)
Number of
102
2963
3.4
Enterprises (Unit)
Annual Average of
All Employees
26116
803000
3.25
(Persons)
Value Added of
40.44
1227.17
3.3
Industry
Total Output
157.5524
4206.37
3.7
Value of Industry
Industrial Sales
144.2
4014.54
3.6
Output Value
Total Assets
251.0145
5960.13
4.2
Revenue from
140.2881
3926.01
3.5
Principal Business
Total Profits and
18.2221
671.39
2.7
Taxes
Total Profits
12.2261
317.63
3.8
Source: Guizhou Provincial Bureau of Statistics, China National Bureau of
Statistics Survey Office in Guizhou, Guizhou Statistical Yearbook (Beijing,2011)
Table 6 and table 7 show that Guizhou's export value was USD1919.03 million,
the import value was USD1218.98 million and the favorable balance reached
USD700.05 million in 2010. Wherein, Guizhou's foreign-funded enterprises had
the export revenue of USD105.28 million (accounting for 5.48% of Guizhou
exports) and paid USD69.2 million (accounting for 5.67% of Guizhou imports) for
imports, and the trade surplus reached USD36.08 million.
Compared to the China national level, the export contribution of Guizhou's
foreign-funded enterprises was 49 percentage points lower than 54.64%-China
national average level. As for the import value, their proportion was lower than
the China national level by 48 percentage points.
It can be seen from the above data that FDI enterprises optimized Guizhou’s
export structure to a certain extent, however Guizhou’s overall export scale was
small and FDI enterprises in Guizhou did not boost the optimization of the local
exports obviously.
Table 6: Exports and imports of foreign - funded enterprises of China, 2010 (USD
10000)
Cai Li et al.
46
Foreign-funded
Enterprises
Value of
Exports
Percent of
China Exports
（%）
Value of
Imports
Percent of
China Imports
（%）
Equity Joint
23758160
15.05
20978710
15.02
Venture
Contractual
1647020
1.04
2385128
1.7
Joint Venture
Wholly
Foreign-owned
60817702
38.54
52121824
37.33
Enterprises
Total
86222882
54.64
75485662
54.06
Source: Department of Trade and External Economic Relations Statistics, China
National Bureau of Statistics, China Trade and External Economic Statistical
Yearbook (Beijing,2011)
Table 7: Exports and imports of foreign - funded enterprises of Guizhou, 2010
(USD 10000)
Foreign-funded
Enterprises
Value of
Exports
Percent of
Guizhou
Exports（%）
Value of
Imports
Percent of
Guizhou
Imports（%）
Equity Joint
4204
2.19
4828
3.96
Venture
Contractual
266
0.13
186
0.15
Joint Venture
Wholly
Foreign-owned
6058
3.15
1906
1.56
Enterprises
Total
10528
5.48
6920
5.67
Source: Department of Trade and External Economic Relations Statistics, China
National Bureau of Statistics, China Trade and External Economic Statistical
Yearbook (Beijing,2011)
3 Recommended policy for improving the utilization of FDI
in Guizhou
3.1 Investment policy
3.1.1 Setting up investment attraction platform
When making full use of famous international and domestic exhibitions to invite
FDI, Guizhou government and local enterprises can elaborately plan the
investment attraction platforms, specially for the investors from Hong Kong,
Analysis of Inviting Foreign Direct Investment
47
Macao, Taiwan and Southeast Asia.
They can take full advantage of Guiyang Jinyang International Exhibition Center
to build well-known provincial or even national exhibition brand and continue to
support “Colorful Guizhou”, Tourism Commodity Design Contest, Craftsmen
Contest, Tourism Trade Fair, Alcoholic Beverage Expo, Provincial Tourism
Development Forum, Huangguoshu Waterfall Festival and Investment & Trade
Fair as well as Guizhou Business Forum, creating more opportunities for domestic
and foreign investors to visit and further invest in Guizhou. Each city (county)
should build influential investment attraction platforms.
3.1.2 Strengthening construction of FDI project databases
In accordance with Guizhou’s “Twelfth Five-Year” Industrial Development Plan,
industrialization and urbanization strategies, Guizhou government and local
enterprises can make preparation, selection and evaluation of industrial FDI
projects with long industrial chain scientifically and reserve management for FDI
projects conscientiously, and also review the construction of FDI projects strictly.
Complying with the international universal standards, they can work out the
technical assessment and cooperation modes for all the recorded FDI projects. For
key large projects, the operation study reports about construction plan,
environmental protection work and land use should be prepared in order to
enhance the quality of the FDI project preparation work.
At the same time, banks, industrial parks database, intermediaries and investment
attraction networks are required to be combined for local government better
services and dynamic management as well.
3.1.3 Attracting investment innovation
Guizhou government and local enterprises can explore efficient investment
attraction ways with property rights, set up investment attraction platforms outside
the province to establish external relations and promote the agent system,
encourage various chambers of commerce, provincial (urban, district) chambers of
commerce and other related associations to invite foreign investment jointly as an
alliance.
The enterprises in Guizhou can adopt a variety of effective financing means,
including joint ventures, merger and reorganization, equity acquisition, BOT
(building - operation - transfer) and TOT (transfer - operation- transfer), BT
(building - transfer), ABS (asset securitization) to invite more foreign capital, such
as industrial capital, commercial capital and financial capital. They can further
raise the level of foreign capital utilization, absorb foreign capital, technologies,
talents and management modes rationally and effectively.
Also, Guizhou government is required to coordinate the relationship between
quantity and quality of foreign investment, combine foreign investment with the
adjustment of the industrial structure, the extension of the industrial chain, the
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Cai Li et al.
consolidation of supporting capacities and high-tech industries to promote the
industrial structure optimization and upgrading of Guizhou.
3.1.4 Deepening the reform of administrative approval system
The relevant departments of Guizhou government should further decentralize the
rights in approval and registration of all kinds of FDI projects in investment scale,
environmental assessment, construction sites and other aspects. Each city (county)
should also do so, as well as stimulate the initiative and creativity of all levels of
Guizhou government in utilization of foreign capital expansion and opening up.
3.2 Financial policy
Guizhou government should expand the scope that agricultural insurance premium
subsidies cover, encourage domestic and foreign financial institutions to initiate
new rural financial institutions, advocate insurance funds to flow to transportation,
energy, water conservancy, municipal utilities, power grids and other
infrastructure and key industrial projects.
Also it can strengthen the communication and coordination between local
governments and financial regulatory authorities, encourage the cooperation
among financial institutions, support the establishment of venture investment
guidance fund, standardize the development of equity investment and further
promote the marketization of municipal utilities and diversify investment entities.
Various financial institutions can innovate financial products to support the
construction of industrial development zones in Guizhou, particularly intensify the
financial support for FDI projects in Guizhou.
Professional insurance institutions can expand the credit insurance coverage,
augment the insurance scale, develop the insurance products which support
agricultural programs and open economy development in investment attraction,
and provide multi-channel insurance services for domestic and foreign
cooperation projects in Guizhou.
3.3 Industrial policy
Within the scope permitted by China national industrial policy, the restrictions on
the access to some industries where Guizhou has resource advantages and huge
market demand should be relaxed appropriately. Energy and resources
development and utilization FDI projects which can be set up in Guizhou should
be planned, designed, examined and approved as priorities.
Guizhou's energy-saving and emission reduction targets need be determined
reasonably. The central budget of China government is required to help Guizhou
closing down the local backward production capacity enterprises gradually.
Analysis of Inviting Foreign Direct Investment
49
Guizhou government and local enterprises need support the pilot reform of coal
mining rights, guide the preparation and revision of coal mineral rights programs,
as well as decentralize mineral rights rationally and orderly.
4 Conclusion
In the terms of the scale, forms, countries, industrial distribution, geographical
distribution of FDI, Guizhou has the following characteristics in using FDI:
By scale, the amount of FDI has increased gradually, however Guizhou has not
yet become an attractive FDI hot spot compared with other provinces of China,
especially the eastern regions in China. The average INDi within 14 years of
Guizhou is only 0.144, equivalent to one seventh of China national average level.
By form, the FDI enterprises in Guizhou are mainly joint ventures and wholly
foreign-owned enterprises. Before 2005, joint ventures took a dominating position.
Since 2006, wholly foreign-owned enterprises have occupied a dominant position.
At the same time, the proportion of the wholly foreign-owned enterprises in all
foreign-funded enterprises in Guizhou has been less than that of China national
average level.
By country or region, 43% of the FDI came from Asia, especially Hong Kong.
Guizhou should actively establish good relations with developed countries in
Europe and America as well as introduce the investment from these developed
countries vigorously to improve the status quo and avoid vulnerabilities and risks
incurred by the current simple structure of FDI countries and regions.
By industry, for a long time, a very small amount (4.53%) of FDI was used in the
primary industry of Guizhou. More than 64% of the projects for contracted FDI
and actually used foreign capital concentrated in the secondary industry,
especially manufacturing sector. About 30% of the FDI projects and foreign
capital used were involved with the tertiary industry. The hot spots included real
estate, scientific research, technic services and geological prospecting, financial
intemediation sectors. In 2011, the targets of FDI changed significantly. “electric
power and water production and supply”, “farming, forestry, animal husbandry
and fishery”, “leasing and business services”, “transport, storage and post”
became new highlights.
By operating performance, designated size foreign-funded industrial enterprises in
Guizhou did not contributed much to Guizhou's industrial economic development,
without strong driving effects. FDI enterprises optimized Guizhou’s export
structure to a certain extent, however did not boost the optimization of the local
exports of Guizhou obviously.
Finally, the paper gives the remmended policies, such as investment policy,
financial policy and industrial policy to set up the investment attraction platform,
strengthen the construction of FDI projects database, innovate the inviting foreign
investment ways for further improving the utilization of FDI in Guizhou.
Cai Li et al.
50
ACKNOWLEDGEMENTS: This research was supported by National Social
Science Foundation of China (11BMZ043) and the Fundamental Research Funds
for the Central Universities of China (ZJ12RWZD010, ZJ12RWQN018)
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